UK Cards Association produces guide for digital wallet providers

Digital wallets, where a debit or credit card account is linked to a smartphone or other electronic device, have been slow to take off but growing numbers of consumers are now using them in the UK.

Data centre provider Equinix says that as awareness increases and security concerns are addressed, and providers continue innovating to increase the value and utility of the digital wallet, adoption will continue to grow.

“In fact, there’s every reason to think that digital wallets will soon be as ubiquitous as the mobile devices they live on” argues Jeroen Schlosser, Managing Director of Equinix MENA, in an article for technology news site ITP.net.

To assist new digital wallet providers planning to operate in the UK, the UK Cards Association has published a new guide which sets out the conventions and behaviours of the card payment system in the UK.

The informal guide was developed with the input of a range of different organisations, including card issuers and acquirers, existing digital wallet providers, mobile network operators and international card schemes.

It explains the industry-level considerations a digital wallet provider planning to launch a UK service needs, and covers processes throughout the whole lifecycle of the product such as registering and verifying a new card, making payments face-to-face, handling lost or stolen devices and terminating the service.

David Baker, Head of the Card Payment Innovations Unit at the UK Cards Association, commented: “With a growing number of different wallet systems being developed, it can be challenging for consumers and retailers to know how all the competing offerings work. We hope this new guide will help to guard against low-quality services being introduced into the market and help providers understand some of the differences of the UK market so they can get the best out of their products.”

A recent report by Accenture, quoted by Jeroen Schlosser from Equinix, confirmed that digital wallets are currently used only by a minority of consumers.

Just 19% of consumers currently pay in store with their phone, while 23% regularly use their smartphone to pay online. Among the reasons for the slow take-up of digital wallets are concerns about payment safety, a lack of the terminals needed to process an in-store payment, and a lack of awareness about the technology.

“But overall, the trend in digital wallet use is unmistakably upward” Schlosser said.